“Dormant” LLCs in Ukraine: Risks and Solutions in 2025
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Since the start of the full-scale war in Ukraine, many businesses have been forced to suspend their operations. Some halted temporarily, while others shut down entirely. As a result, the number of legal entities that remain registered but no longer conduct any commercial activity has increased. These are referred to as “dormant” LLCs.
At first glance, a dormant Limited Liability Company may not appear to pose any issues. In reality, however, inactivity can lead to significant risks for owners, from fines and debts to other legal consequences. This is especially relevant in 2025, as regulatory bodies have become more proactive and tax monitoring algorithms more stringent.
That’s why, if you are the owner or director of a dormant company, it is crucial to understand that dormancy doesn’t mean an absence of problems — it means those problems are accumulating. In this article, we examine the specific risks that dormant LLC owners face in 2025 and what steps to take to avoid legal trouble and unnecessary expenses.
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What Are “Dormant” LLCs?
Dormant LLCs are registered limited liability companies that do not engage in active business operations but continue to exist legally. These companies:
- do not conduct transactions;
- have no assets or turnover;
- still retain obligations to the state or their counterparties.
Key Risks for Owners of Dormant LLCs
Owners of dormant LLCs face several potential issues that can seriously affect both the company’s financial standing and its overall reputation.
1. Penalties for failure to submit reports.
One of the main risks for such a “dormant” company is the imposition of fines for failure to submit reports. This applies not only to tax reports but also to statistical reports, which must be filed regardless of whether any business activity has taken place. If deadlines are missed or reports are not submitted at all, the LLC may face financial sanctions: 340 UAH for each violation, and 1,020 UAH if the declaration is repeatedly not submitted (or submitted late) within the same year.
Penalties accumulate over time. Even small amounts, if left unresolved, can grow into significant debts, which may create obstacles in the future, for instance, when attempting to close the company or change its legal status.
2. Account freezes and revocation of tax status.
Another serious risk is the potential freezing of bank accounts or revocation of tax statuses. Tax authorities have the authority to classify companies as high-risk entities, particularly in cases of inactive operations or failure to file reports.
3. Revocation of single taxpayer status.
Moreover, for entities using the simplified taxation system, there is a risk of automatic revocation of single taxpayer status due to repeated violations, such as late reporting or failure to comply with established limits.
4. Bank monitoring.
Banks continuously monitor company activity. If they detect that a company is dormant, they may suspend account services pending clarification. If the company has outstanding debts, the accounts can be frozen regardless of whether there are funds in them or not.
5. Unified Social Contribution (USC).
Even in the absence of active operations, a company remains responsible for basic financial obligations, including salary accrual and payment of required taxes. One such obligation is the payment of the Unified Social Contribution (USC) for the company’s director. Prolonged failure to comply results in debt accumulation, along with penalties and interest charges.
These outstanding liabilities can complicate efforts to resume operations or liquidate the company.
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What to Do with a “Dormant” LLC: A Risk-Free Solution
Leaving a dormant LLC unattended leads to legal and financial risks. It is important to act before inactivity triggers problems with tax authorities or banks.
Our corporate law attorney will help you assess the current status of your LLC, identify hidden risks, and develop the best course of action.
If needed, we can initiate voluntary liquidation, resume operations, or legally place the company into a compliant dormant state without violating regulations.
Our legal team will also provide:
- full support with LLC termination or director change procedures;
- analysis and resolution of outstanding debts to regulatory authorities;
- submission of required documentation to the tax office;
- removal of the company from risk watchlists held by tax and banking institutions;
- reinstatement of tax status (if appropriate), or guidance on switching to a different tax regime.
Don’t let a dormant LLC turn into a liability. Our legal team will help you close the company transparently, efficiently, and with no outstanding tax issues.
Contact us, and we’ll provide the legal support you need to eliminate current risks and prevent future complications.
